Tuesday, January 25, 2011

RBC sees 4 million PlayBooks sold in 2011

RBC Capital Markets analyst Mike Abramsky wrote in a report today that the BlackBerry Playbook could sell 4 million units this calendar year, and 6 million units in 12 months after launch.  He used a survey by RBC of 1,100 people.  The survey was conducted between Jan. 6 and 8, after CES 2011.

Mike Abramsky also noted that the PlayBook will appeal to early adopters and power users, because of its speed/power, security and IT integration.  He also stated that the PlayBook's tethering ability might be an advantage.  He calculated that sales of 4 million units would add $1.8 billion to RIMM's revenue and $0.30 in EPS, assuming ASP of $450.

 I expect RIM to sell 3 to 4 million PlayBooks in calendar 2011, with an upside potential of 5 to 6 million.  There is a large pent-up demand from corporations for the PlayBook, with companies such as Manulife and TD Bank having already expressed interest.  The ability for IT departments to easily integrate the PlayBook into their existing architecture is a plus.  The legendary BlackBerry security and the ability to tether (have the PlayBook display information from the handset but not store the information) are additional advantages of the PlayBook.

As for the consumer market, with 55 million subscribers, RIMM will see success by simply selling to a fraction of the installed base in the first year.  The PlayBook's dual-core processors and QNX OS gives users the performance and multi-tasking ability that is unavailable on other tablets.  As was mentioned on this blog previously, analysts got a hands-on experience of the PlayBook running a HD video, video game, pictures and other apps at the same time during CES.

 Thus, sales of the PlayBook will surprise the bearish analysts, many of whom are based in the US.  With pent-up demand from corporations, and its performance and multi-tasking ability appealing to consumers, RIMM will be able to sell 3 to 4 million units of the PlayBook in 2011, with an upside of 5 to 6 million units.  

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